2014 business investments may top 2013's

SAN ANTONIO — With 15 relocations and expansions in the bag so far in 2014, the San Antonio Economic Development Foundation expects the year to end with as many as 30 such announcements, SAEDF President Mario Hernandez said Wednesday.

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In recent years, however, job totals have surpassed 4,000. The 2011 total was 4,917 for 21 projects, and there were 4,157 in 2010 for 16 projects.

Although San Antonio has been discussed as a candidate for a giant battery factory planned by California-based Tesla Motors Inc., Hernandez declined comment after his presentation to a midyear economics luncheon held by the San Antonio chapter of the Associated General Contractors of America.

SAEDF's job creation is different from total job creation in the San Antonio area. The latest net job-creation projection for 2014, from SABÉR Research Institute Chief Economist Steve Nivin, is for a range of 22,800 to 27,500 jobs, a 2.5 percent to 3 percent net gain from 2013.

Leading SAEDF's 2014 list so far is Dollar General Corp.'s announcement of 538 jobs associated with a new distribution facility.

The largest new manufacturer is FMC Technologies, an oil field services company that has announced 160 jobs.

SAEDF, which receives funding from private-sector members along with local governments, has 126 active prospects for relocations or expansions, 61 of which were identified this year, Hernandez said.

San Antonio's best advantages for attracting business investments are its cost of living, which is 7.5 percent less than the national average, affordable land and energy, an areawide skilled workforce of more than 1 million people and 15 colleges and universities enrolling about 150,000 students, Hernandez said.

According to an Area Development survey, the magazine's top three business investment factors for 2014 are, in order, skilled labor availability, highway accessibility and labor costs.

Speaking to construction industry representatives, Hernandez pointed to the total of $2.3 billion from 5,262 commercial building permits in San Antonio between October 2013 and June 2014. The nine-month total valuation is larger than the $1.92 million over the 12 months between October 2012 and September 2013, he said.

Construction spending nationally is improving gradually but not consistently across business sectors or geographically, said a second speaker at the luncheon, AGC Chief Economist Ken Simonson.

Construction spending nationally should rise 6 percent to 10 percent per year through 2017, Simonson predicted, mainly from construction related to shale energy field activities, the widening of the Panama Canal and a revival in residential construction, more so with apartments than single-family housing.

The spending could be offset largely by a rise in material costs through 2017 of 1 percent to 3 percent annually and labor costs of 2.5 percent to 5 percent, he added. Employment shortages will continue to hold labor costs up, he said, listing equipment operators, carpenters, laborers, project managers and estimators as the hard-to-fill positions.

Additional strong prospects for construction in 2014 are manufacturing, warehouses, hotels, rail and data centers, Simonson said. Office and education-related construction spending are among the weak sectors nationally, he said, although Houston is seeing a boom in corporate headquarters construction.

The San Antonio area's construction employment between May 2013 and May 2014 rose 2 percent, less than the statewide growth of 4 percent.